Along a bowed-out production possibilities frontier, as more of one good is produced,
A)the opportunity cost of producing that good remains constant
B)the opportunity cost of producing that good decreases
C)efficiency decreases
D)the opportunity cost of producing both goods must remain constant
E)technology remains constant

Question

Quizplus · Accepted Answer

A bowed-out production possibilities frontier (PPF) reflects increasing opportunity costs, meaning that as more of one good is produced, the opportunity cost of producing additional units increases. The assumption of constant technology is what allows the PPF to be drawn in the first place, so technology remains constant.

Along a Bowed-Out Production Possibilities Frontier, as More of One